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Haroon is right. The alternator has three wires (assuming an internal voltage regulator) and they all must be OK for things to work.
The warning lights light up when their ground side is completed. If they are on the ground side is complete. When things work right, the only way that ground side can complete is through the alternator brushes.
That is the thin wire on the alternator spade connector. As soon as the alternator begins charging, that circuit is no longer a ground, so the lights go out. Then the little current that comes through the wire from the warning lights becomes the exciter voltage for the alternator.
What you have is a ground in that circuit in an unauthorized place. Result is lights never go out and alternator doesn't charge. Should be an easy fix.
The alternator is mounted on rubber bushings and thus must be grounded to the block. There is a wire from the alternator frame to one of the mount bolts. Be sure it's OK.
The charging current leaves the alternator through a stud connected heavy guage wire that goes to the starter, or maybe direct to the battery.
Hope this helps.
Good Luck,
Bob
:>)
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